Exploring the Market for School Choice

Is the rise of publicly funded school choice a triumph for the
competitive-market approach to public education, where parents vote for
public education with their feet? For market-oriented purists, the
experience of Cleveland and Milwaukee suggests the answer is no. The
template proposed by one of the intellectual fathers of "choice,"
economist Milton Friedman, does not fit well on these two
programs--currently the only two operational, state-approved choice
experiments in the country.

Back in the 1960s, Mr. Friedman discussed a school voucher proposal
in his book Capitalism and Freedom. Mr. Friedman's idea was to
provide parents with a minimum sum of public money per year, per child,
to be spent on approved educational services. Parents would be free to
spend this sum and any additional amount of their own on schooling from
an approved institution of their choice. This amounted to a universal
voucher system which would redefine public education by allowing all
parents to make competitive educational choices for their children with
public financial support.

In contrast, the Milwaukee and Cleveland choice programs are
limited--aimed at a target market and regulated by certain guidelines.
The target market is urban, low-income, mostly minority families who
are perceived by choice advocates as being trapped into attending
educationally deficient public schools in their districts. The
rationale is to provide educational choices to low-income families
similar to those already open to families with more financial
resources.

The choice programs are redistributive, shifting tax dollars from
public school systems to low-income parents. The legislation creating
the Milwaukee program prohibited any private school participating in
choice from charging tuition above what was covered by the amount of
the public voucher. The voucher currently is worth $4,700, the
equivalent of the state's per-pupil aid given to the Milwaukee school
district. This school year the program will offer choice opportunities
to up to 15,000 children, who can attend both religious and
nonreligious schools.

The legislation for Cleveland limited parents' out-of-pocket payment
to between 10 percent to 25 percent of tuition, depending upon family
income. The maximum allotment last year was $2,500. Last school year,
3,000 Cleveland children attended 56 religious and nonreligious
schools.

These regulations in both communities were designed to ensure that
the programs would help those individuals who were least able to afford
to leave the public school system.

This kind of choice program is more analogous to a type of
economically targeted investing, or ETI, than to a broad free market.
Economically targeted investing is defined as investments that try to
capture both financial and nonfinancial returns. In some cases, ETIs
have been labeled as investments that subordinate rate of return to
other, nonfinancial benefits, such as societal needs.

In the case of the choice markets created in Milwaukee and
Cleveland, the guidelines controlling the use of the educational
vouchers were similar to those accompanying a social-investment fund.
The vouchers were given to parents of children who policymakers agreed
were being left out of the market.

Why this targeted approach to educational choice rather than the
broad free-market concept? It is clear from the political history of
the legislation and from the research of the nonprofit Public Policy
Forum that a targeted program was necessary in order to garner the
needed political support for school choice in Ohio and Wisconsin. In an
18-month study, the Public Policy Forum interviewed 295 parents,
educators, and policymakers in Cleveland and Milwaukee. In addition, we
conducted a public opinion survey of 771 taxpayers in Ohio and
Wisconsin.

There was considerable public support throughout the two states for
a market approach to public education. The forum's survey research
indicated that 76 percent of the taxpayers in both Wisconsin and Ohio
supported choice. Of those surveyed, 23 percent supported choice only
for low-income parents. Another 53 percent supported choice for all
parents, regardless of income. With a reasonable margin for error,
support for choice, regardless of a parent's income, was evenly split
among the taxpayers of the two states. Overall support for choice was
dependent upon combining those who supported vouchers for low-income
families and those who backed vouchers for all parents.

At the same time, the survey results showed that an unfettered
market approach to education, including allowing schools to charge what
the market would bear, was not supported by the African-American
communities in Wisconsin and Ohio. For instance, when asked whether
choice schools should be allowed to charge parents more in fees than
the publicly financed voucher, only 43 percent of the African-Americans
said yes, compared with 71 percent of the whites.

Can open, unrestricted choice survive politically if it is not
perceived at the grassroots as providing a level playing
field?

In other words, political conservatives who were mainly identified
with a market approach to public education had to find allies among
political liberals from low-income constituencies in Milwaukee and
Cleveland. The latter were not necessarily market advocates. They were
legislators and policymakers who in many cases felt that the benefits
of market economics traditionally had bypassed their constituents. They
supported vouchers for low-income families because they looked to
government for a solution to urban public school systems they believed
were failing, thus once again leaving their constituents behind.

It was that coalition of conservatives and liberals that has made
choice in its current form possible in Milwaukee and Cleveland. The
question for the future is whether this coalition is sustainable and
can lead to real and lasting educational reform for low-income
children.

There are already signs that the coalition is fraying, making it
look more like a temporary marriage of convenience, rather than a
permanent relationship in support of urban education reform.

In Wisconsin, market-oriented education advocates have won
legislation that provides public school choice throughout the state.
Parents can now send their children to any public school district as
long as the potential receiving district will accept the children and
the parents are willing to pay the transportation costs. There are no
income restrictions. In addition, the mayor of Milwaukee recently
announced that he will be lobbying state officials aggressively to
raise or phase out the income cap on the private school choice
program.

Charter legislation has also passed, allowing charter schools to be
established in Milwaukee by the Milwaukee school district, the
Milwaukee Area Technical College, the University of
Wisconsin-Milwaukee, and the city itself. Under the law, charter
schools are open to all city students. They are not designed
specifically to assist low-income families. Further, the state voucher
for charter schools is $6,100 per pupil, considerably more than the
choice school vouchers.

This has led a number of choice schools to apply for charter status,
through which they would receive more money per pupil and have no
income restrictions on whom they accept. Fourteen of the 23 operating
choice schools in Milwaukee sent letters of intent to become charter
schools. The four schools granted charters by the city are choice
schools.

All of this has produced a sour taste for some of the ardent
supporters of choice within the central city. For instance, Rep.
Annette Polly Williams, a black Democratic legislator from an
inner-city Milwaukee district who has received national attention for
her support of choice, has supported introducing legislation limiting
the number of students who can attend choice schools and ensuring that
the income guidelines remain. She has also opposed the charter school
movement. She is concerned that the needs of minorities and the poor
are once again being forgotten.

A similar falling-out has occurred between more conservative,
statewide advocates for choice in Ohio and the leading black,
grassroots advocate from Cleveland, City Councilwoman Fannie Lewis. As
one Ohio state representative said, "Fannie Lewis legitimized the
school choice program because of her stature."

This raises the interesting question about the true role of the
competitive, market-driven approach to educational reform. Who will
benefit most from open, unrestricted choice? Can it survive politically
if it is perceived at the grassroots in the inner city as not providing
a level playing field of educational opportunity for minorities and the
poor?

Emily Van Dunk is the research coordinator at the Public Policy Forum
in Milwaukee. She is the author of "School Choice in Cleveland and
Milwaukee: What Parents Look For" and "Choice School Accountability: A
Consensus of Views in Ohio and Wisconsin."

Vol. 18, Issue 2, Pages 39-40

Published in Print: September 16, 1998, as Exploring the Market for School Choice

Notice: We recently upgraded our comments. (Learn more here.) If you are logged in as a subscriber or registered user and already have a Display Name on edweek.org, you can post comments. If you do not already have a Display Name, please create one here.

Ground Rules for Posting
We encourage lively debate, but please be respectful of others. Profanity and personal attacks are prohibited. By commenting, you are agreeing to abide by our user agreement.
All comments are public.